Kansas taxpayers will lose $50 million on pipeline from Canada

Complaints and concerns flow about oil pipeline in Kansas. Crude oil from western Canada began flowing through a controversial pipeline in Kansas this month. Pipeline supporters insist that its construction provided an economic boon, producing money and jobs for the state. But local officials along the pipeline’s path complain that the state sold them out — unnecessarily — to attract the oil company. Because of an exemption the state gave the company that owns the pipeline, six Kansas counties won’t see a dime in property taxes from the project for a decade, a loss they estimated at $50 million in public revenue. There are environmental concerns, too, in Canada and in other states where the pipeline runs beneath drinking water supplies. “If we had that pipeline on the tax rolls this year, we could have cut our levy by 30 to 40 percent,” said Dan Holub, a Marion County commissioner. “Rural counties don’t have much of a tax base and a whole bunch of expenses. We’ve got 1,600 miles of road.” Supporters of the deal, however, counter that the pipeline company will owe taxes for 90 years after the abatement expires. They said the project would help the state’s shrunken oil industry and was environmentally sound. But questions persist about whether the company, Alberta, Canada-based TransCanada, used the power of eminent domain to improperly acquire access to the land. That’s how it obtained an easement through Greg Roles’ 160 acres of wheat and soybeans in Clay Center. He resisted TransCanada’s $15,000 offer and is suing the company in a case that could end up before the Kansas Supreme Court on appeal because Roles lost at the district court level. “I’m the only guy who has tried to stand in front of them,” Roles said. “I know I’m the only guy in Kansas. This deal just isn’t right. Where are our elected officials?” The debate isn’t likely to go away. That’s because TransCanada plans to use its existing Kansas pipeline, called the Keystone, as a pivotal piece in a $7 billion, nearly 1,700-mile project to transport heavy oil from Canadian tar sands to refineries in Texas. The pipeline, called the Keystone XL, could carry up to 500,000 barrels a day, doubling the amount of oil that TransCanada brings in overall. The massive undertaking has galvanized opponents who argue that safety and the environment are at risk. In Nebraska, where the proposed pipeline would be built to connect to the Kansas portion, it would run beneath the Ogallala Aquifer — a shallow water table that provides drinking water for about 2 million people in eight states, including parts of central and western Kansas. Currently, the Kansas pipeline can move only 156,000 barrels of oil from northern Alberta to a refinery in Cushing, Okla., by way of several Canadian provinces and several states. The new project would construct a separate pipeline to carry Canadian crude south through six states, including the existing pipeline in Kansas, to refineries in Texas. The company claims the project would create about 20,000 new construction and manufacturing jobs and add $20 billion to the U.S. economy. It also would “improve U.S. energy security and reduce dependence on foreign oil from theMiddle East and Venezuela,” Russ Girling, TransCanada’s president and CEO, said in a recent statement. That’s backed up by a recent report from a private energy consultant for the U.S. Department of Energy. It said that Canadian crude oil and reduced demand “could essentially eliminate Middle East crude imports longer term.” But the report also pointed out that if Canadian suppliers export oil to Asia from Canada’s west coast, “more Middle East crude moves into the USA.” It further noted that with so many pipelines bringing crude across the border, TransCanada’s new pipeline, if approved, might not be needed for years. Approval of a cross-border permit will be up to Secretary of State Hillary Clinton. Several members of Congress wrote in support of the project, but others urged her in a letter last summer to go slow in her decision, which is expected by spring after her department looks at the environmental effect. The EPA said that the State Department’s original report last year was “unduly narrow” because it did not fully examine oil spill response plans, safety issues and greenhouse gas concerns. If the administration signs off on the pipeline, it would inadvertently be aiding two of President Barack Obama’s arch political foes: David and Charles Koch, who own Wichita-based Koch Industries. The Kochs have bankrolled conservative efforts and candidates who oppose Obama and the Democratic Party’s environmental policies. According to Solve Climate news, an energy and climate online news service, the Kochs would stand to gain from the project because their company controls nearly a quarter of all tar sands crude oil imported into the United States. Extracting the oil from tar sands and liquefying it enough so it will move through a pipeline is an energy-intensive process that adds greenhouse gases to the atmosphere. Getting it out of the ground in Canada involves clear-cutting forests, leaving a wasteland that oil companies promise they will restore. “From start to finish, this a dirty project,” said Stephanie Cole, a spokeswoman for the Kansas chapter of the Sierra Club. “Forests in Canada are being destroyed and increased reliance on fossil fuels will accelerate global warming.” ((14 FEB 2011))